Fixed Annuities: What to Consider When Choosing The Right One For You
If you believe all fixed annuities are exactly alike, think again. Fixed annuities have different options and rates to fit almost everyone’s needs. The key to finding the right annuity is getting annuity quotes that to find the one that’s best for your situation. An annuity quote helps you eliminate some of the products that don’t fit your situation and find those that pay you the most money. In addition to increasing your return, there’s even more good news, annuity quotes are free.
There are thousands of fixed annuities available with each one offering you something special. Of course, what you’re most interested in is the rate of return for your money. The way you use the annuity makes a difference on the contract that makes the best sense for your needs. Checking several different annuity quotes helps you do this.
People that want a fixed contract to act like a tax-deferred account but don’t intend on taking the money in payments need to look for different types of benefits than the person that simply wants a monthly, quarterly or annual payment. The annuities that simply set and grow are deferred annuities. This means you defer the payment to a later date.
Of course, if the person selects a deferred annuity, it doesn’t mean they never want payments from the contract. They may want to avoid taxation until they retire and then take payments later. This is possible. If you select deferring payments, check both the immediate interest rate and the guaranteed rate.
Using a website that offers annuity quotes helps to find the best rates without sitting through a long series of interviews with different reps. The annuity quotes sites often offer the consumer the ability to speak to a live representative if there’s any questions they have.
Surrender fees schedules are important to check when purchasing a fixed deferred annuity. The surrender fee is a percentage of the lump sum invested based on the number of years you hold the annuity. The length of time varies but some companies always have a surrender fee unless you annuitize, turn the policy into systematic payments.
Almost all companies allow you to take the interest each year without a surrender fee and some deferred annuities contain a free withdrawal amount in many cases. Some policies offer a ten percent or higher amount either through the life of the contract or annually before the end of the surrender fee period. Of course, if you intend to take money out periodically without annuitizing, it’s important to check how much you can take on an annual basis without imposing the surrender fee.
If you’re very young, you might not want to consider using a CD as a vehicle for savings. Just like a Roth or Traditional IRA, there’s a 10 percent penalty if you remove the funds before you’re 59 . Of course, if you plan to retire early and take systematic periodic payments, there’s no penalty as long as you take the payments until you’re 59 or at least for five years.
For those that want an immediate payment, the best method to find the highest payout is through securing annuity quotes. Just because the product offers the highest rate of return for deferred money, doesn’t mean it offers the highest payment. That’s a different interest rate. An annuity quote gives you the exact amount of money you’ll receive. The difference could be thousands of dollars over the lifetime of payments.
John C. Ryan has written hundreds of articles, in an attempt to better inform investors of their options for annuity insurance. Annuity insurance is a big decision for most retirees Contact us to receive more information, and the latest, best annuity quotes
